A High Court judge told counsel for AIB yesterday he "awaited with interest" the bank's explanation why it had not paid DIRT on a Tipperary farmer's account before 1991.
Mr Justice Geoghegan made his comment during cross-examination by Mr Colm Allen SC, for AIB, of Mr Michael Gayson (67), of Racecourse House, Racecourse Cross, Cashel, who is suing the bank because he claims he received bad advice not to avail of the 1988 government tax amnesty.
Mr Gayson alleges that, had he availed of the amnesty, he would have had to pay £84,000 rather than the £175,000 (including £60,000 in penalties) which he paid to the Revenue authorities. He claims he was advised by an assistant manager in the Cashel branch of AIB, Ms Norrie O'Sullivan, not to avail of the amnesty.
In evidence, Mr Gayson said a retired Cashel branch manager, Mr Denis Murphy, had advised him to put any spare money into a trust fund for his seven children, which would not be subject to tax. He was shocked when told by the new manager of the Cashel branch in 1991 that he would have to pay DIRT, which was introduced in the 1986 Finance Act, and should have been paying it all along. In court yesterday, Mr Allen said the new manager, Mr Silke, would give evidence that he had told Mr Gayson in 1991 that from that time forward DIRT would have to be paid on the £250,000 account.
Mr Justice Geoghegan intervened to asked if the bank was going to give an explanation why it had not paid DIRT in the earlier years. Mr Allen said there would be an explanation.
Mr Allen said it appeared the total tax paid by Mr Gayson over an 11- or 12-year period from 1979 was £14,318.
Mr Allen referred to a tax form sent to Mr Silke in relation to a farm audit, and said Mr Silke would give evidence that Mr Gayson had asked that the £250,000 account be excluded from the form.
Mr Allen suggested Mr Gayson wanted it excluded because he did not want the "tax dodging" to come to the Revenue's attention.
Mr Gayson said it was a lie to say he had threatened Mr Silke or bank employees.
He remembered saying that if he went down, the bank would go down with him. The hearing continues today.